Partout v. Harper

• Decision Date: 25 April 2008
• Docket Number: No. 33979.,33979.
• Citation: 145 Idaho 683,183 P.3d 771
• Parties: Lonnie G. PARTOUT, Plaintiff-Appellant, v. Ron HARPER, Defendant-Respondent, and Adams County Real Estate (Acre), Inc., an Idaho corporation; F. Fred Glesmer; Claudia J. Thomas; and Ernest Breuer, Defendants.
• Court: Idaho Supreme Court

183 P.3d 771

145 Idaho 683

Lonnie G. PARTOUT, Plaintiff-Appellant, v. Ron HARPER, Defendant-Respondent, and Adams County Real Estate (Acre), Inc., an Idaho corporation; F. Fred Glesmer; Claudia J. Thomas; and Ernest Breuer, Defendants.

No. 33979.

Supreme Court of Idaho, Boise, March 2008 Term.

April 25, 2008.

Belnap, Curtis, Williams & Purnell, PLLC, Boise, for appellant. Robert Wade Curtis argued.

Howard, Lopez & Kelly PLLC, Boise, for respondent. Louis Piccioni, Jr. argued.

BURDICK, Justice.

A home buyer brought contract and tort claims against an appraiser appointed by the U.S. Department of Veterans Affairs. The district court granted summary judgment in favor of the appraiser on all of the claims. We affirm the grant of summary judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellant Lonnie Partout purchased a home in 2001 in Council, Idaho. The U.S. Department of Veterans Affairs (VA) guaranteed the loan financing Partout's purchase of the home. Before the VA guaranteed the loan it requested that Respondent Ron Harper perform an appraisal of the property. Harper identified several problems with the property and recommended a county building inspector examine the property so measures could be established to correct the defects. A letter allegedly signed by Partout was sent to the VA stating Partout understood Harper "had issues with the foundation, venting of the foundations, as well as the crawl space," that he and a county building inspector inspected the property, and that all of the issues had been addressed to his satisfaction. Subsequent to his purchase of the property, Partout discovered the foundation was rotten, cracking, and not built to code or reasonable standards, and that the house had electrical and plumbing problems.

Partout sued several people including Harper. Partout first brought his claims against Harper and Ernest Breuer (former owner of the property) in federal court, but that case was dismissed in 2005 for lack of subject matter jurisdiction. Partout then amended his state court complaint against Adams County Real Estate (ACRE), Inc. and two of its employees to include his claims against Harper and Breuer.

As to Harper, Partout alleged breach of contract, breach of the Idaho Consumer Protection Act, and fraud/misrepresentation. Harper moved for summary judgment, which the district court granted on the first claim only. Harper then moved the court to reconsider and the district court granted summary judgment for Harper on all of the claims and awarded him attorney fees. Partout brought this appeal.

II. STANDARD OF REVIEW

In an appeal from an order granting summary judgment, this Court's standard of review is the same as the standard used by the district court in passing upon a motion for summary judgment. Kolln v. Saint Luke's Reg'l Med. Ctr., 130 Idaho 323, 327, 940 P.2d 1142, 1146 (1997). Summary judgment is appropriate if the pleadings, affidavits, and discovery documents on file with the court, read in a light most favorable to the nonmoving party, demonstrate no material issue of fact such that the moving party is entitled to a judgment as a matter of law. See I.R.C.P. 56(c); Badell v. Beeks, 115 Idaho 101, 102, 765 P.2d 126, 127 (1988). If the evidence reveals no genuine issue as to any material fact, then all that remains is a question of law over which this Court exercises free review. Yoakum v. Hartford Fire Ins. Co., 129 Idaho 171, 175, 923 P.2d 416, 420 (1996).

III. ANALYSIS

Partout argues that he was a third-party beneficiary to the contract between Harper and the VA, and that there are issues of material fact precluding summary judgment on his fraud/misrepresentation claims.¹ Additionally, Partout contends the district court erred in granting Harper attorney fees. Both Partout and Harper request an award of attorney fees on appeal. We will address each issue in turn.

A. Summary Judgment on the Breach of Contract Claim

Partout argues summary judgment on the breach of contract claim was improper because there are genuine issues of material fact regarding Partout's status as a third-party beneficiary to the contract between Harper and the VA.² Harper argues Partout only alleged a breach of contract claim based on I.C. § 55-2501 et seq. which deals with a seller's disclosure form, and therefore, does not apply to Harper. We will first address whether the third-party beneficiary claim is sufficiently pleaded and then whether there are issues of fact precluding summary judgment on the breach of contract claim.

1. Breach of contract on the basis of third-party beneficiary theory was an issue for summary judgment.

The district court granted summary judgment to Harper on Partout's breach of contract claim. The court noted Partout submitted argument on the issue of third-party beneficiary theory, however, it determined that argument was irrelevant because Partout's pleading shows the claim was specifically brought under I.C. § 55-2501 et seq., the Idaho Property Condition Disclosure Act. The district court further held that since I.C. § 55-2501 et seq. deals with the seller's property disclosure form, to which Harper was not a party and with which Harper had no involvement, Harper was entitled to summary judgment on the breach of contract claim.

"[I]ssues considered on summary judgment are those raised by the pleadings." Gardner v. Evans, 110 Idaho 925, 939, 719 P.2d 1185, 1199 (1986) (quoting Argyle v. Slemaker, 107 Idaho 668, 669, 691 P.2d 1283, 1284 (Ct.App.1984)). Thus, this Court must determine whether the "pleadings . . . can fairly be viewed as adequately giving notice of the claim." O'Guin v. Bingham County, 139 Idaho 9, 15, 72 P.3d 849, 855 (2003).

Idaho follows a system of notice pleading. Cafferty v. State, Dept. of Transp., 144 Idaho 324, 328, 160 P.3d 763, 767 (2007). "A complaint need only contain a concise statement of the facts constituting the cause of action and a demand for relief." Id. (citing I.R.C.P. 8(a)(1); Clark v. Olsen, 110 Idaho 323, 325, 715 P.2d 993, 995 (1986)).

Partout's complaint sets forth breach of contract as the first cause of action. Partout indicates he is bringing that cause of action against Harper and the seller of the house, Breuer. That section of the complaint focuses on Breuer's written disclosure statement and makes no mention of third-party beneficiary theory. However, Partout does make the following factual allegations in his complaint:

13. Plaintiff is a third party beneficiary of the contract between Harper and the Lender, by which the Lender obtained an appraisal, which appraisal was a condition prerequisite to the lender financing the purchase of the house.

. . . .

16. That as a condition of purchase, the home was appraised by a VA approved appraiser, Harper, who was hired and paid to inspect the home for compliance with VA standards and specification; local, state, and federal building, electrical, plumbing and well, and septic code requirements, and to determine the market value of the property for financing purposes.

17. The appraiser examined and made a report and appraisal to VA for financing.

In the complaint Partout specifically alleges a breach of contract claim against Harper. This claim is supported by factual averments in the complaint alleging the existence of a contract between Harper and the VA, and that Partout is a third-party beneficiary to that contract. Additionally, in this case it is clear the complaint put Harper on notice since in his answer he explicitly alleges Partout is not a third-party beneficiary to his contract with the VA. Therefore, we hold the complaint can be fairly viewed to have provided Harper adequate notice of Partout's breach of contract claim based on third-party beneficiary theory, and thus, it was an issue to be considered on summary judgment.

2. Partout failed to establish the essential elements of his third-party beneficiary claim.

When a contract is made expressly for the benefit of a third person, the contract may be enforced by the third person at any time before the parties to the contract rescind it. Blickenstaff v. Clegg, 140 Idaho 572, 579, 97 P.3d 439, 446 (2004); I.C. § 29-102. "The test for determining a party's status as a third-party beneficiary . . . is whether the agreement reflects an intent to benefit the third party." Idaho Power Co. v. Hulet, 140 Idaho 110, 112, 90 P.3d 335, 337 (2004). The third party must show the contract was made primarily for his benefit; it is not sufficient that the third party is a mere incidental beneficiary to the contract. Id. (quoting Adkison Corp. v. Am. Bldg. Co., 107 Idaho 406, 409, 690 P.2d 341, 344 (1984)); Fenwick v. Idaho Dep't of Lands, 144 Idaho 318, 323, 160 P.3d 757, 762 (2007) (quoting Dawson v. Eldredge, 84 Idaho 331, 337, 372 P.2d 414, 418 (1962) (quoting Sachs v. Ohio Nat'l Life Ins. Co., 148 F.2d 128, 131 (7th Cir.1945))). The intent to benefit the third party must be expressed in the contract itself. Idaho Power Co., 140 Idaho at 112, 90 P.3d at 337 (quoting Adkison Corp., 107 Idaho at 409, 690 P.2d at 344;) Fenwick, 144 Idaho at 323, 160 P.3d at 762 (quoting Adkison Corp., 107 Idaho at 409, 690 P.2d at 344).

In his appellate brief, Partout fails to point to any specific written contract or to set forth the terms of an oral contract showing an intent that the contract benefit Partout. Partout states that in support of his third-party beneficiary claim he submitted portions of the VA's Lender's Handbook and portions of the Uniform Standards of Professional Appraisal Practice which "establishes a material issue of fact as to his status as a third party beneficiary." However Partout does not show that these documents comprise part of the contract, and Idaho law requires that the intent to benefit the third party be expressed in the contract itself.³

The assignment letter requesting Harper appraise the property appears in the record, but does not express any intent to benefit Partout....